lakewood, NJ · Member since 2017 · 282 posts · 156 votes
I am a new investor here, and while I only looked closely at two neighborhood near me, my evaluations of different properties showed they would not cash-flow, even if I bought them at a slight discount.I have a few questions, and would appreciate any feedback I can get about one or more of these questions...
1) Is that just the ones near me, or are there other areas that are better for finding cash-flowing rental properties?
2) Anyone out there has had success with finding cash-flowing properties in NJ?
Newark, NJ · Member since 2017 · 26 posts · 13 votes
8y
@Fradel Schaechter You can find cash flowing properties in NJ area. Try to look around the neighboring town close to the NY city. I know a lot of them are investing in Newark and Elizabeth. Some other towns like Rahway, Linden, Roselle, etc. Another way to select the towns is to go to MLS, find the towns which has the most recent sales of multifamily properties. Then you can research one by one and find which one you like most and go from there. In every town, there are investors who are killing it and you just to have to find the town that matches your investment philosophy. Hope this help a little bit.
1) It could be just your area. Sometimes you may have to look in other areas and research the rental market.
2) Yes! There are cash-flow properties in NJ. All my properties are cash-flow. Each area is different. I believe Lakewood is in Central Jersey, maybe near Jackson? I'm not too familiar with that area as far as rental properties. My investments are in South Jersey.
3) I haven't used the BRRR method yet so I can't comment. I do plan on purchasing more real estate within the next year with the idea of adding value and taking the equity to invest in more.
Investor · Jackson, NJ · Member since 2010 · 167 posts · 55 votes
8y
Money is made at the buy, so as long as you buy right you can find the deal. That is why we while some use fliers and others use shortsale/foreclosure as a method to find real estate we have focused on buying defaulted mortgages and foreclose on the borrower. We then have a better control, as the lender, on the asset than others.
Newark, NJ · Member since 2017 · 26 posts · 13 votes
8y
@Fradel Schaechter You can find cash flowing properties in NJ area. Try to look around the neighboring town close to the NY city. I know a lot of them are investing in Newark and Elizabeth. Some other towns like Rahway, Linden, Roselle, etc. Another way to select the towns is to go to MLS, find the towns which has the most recent sales of multifamily properties. Then you can research one by one and find which one you like most and go from there. In every town, there are investors who are killing it and you just to have to find the town that matches your investment philosophy. Hope this help a little bit.
lakewood, NJ · Member since 2017 · 282 posts · 156 votes
8y
It is really reassuring to know I just need to keep on trying. Everyone I spoke to so far are fixing and flipping here, as that seems to be where the profits are made. I will keep looking for my deal, I know it is out there!
Thanks for these pointers. They are really helpful to give me some direction...
Investor · Jackson, NJ · Member since 2010 · 167 posts · 55 votes
8y
@Fradel Schaechter fix and flip can make money however the method to get that fix and flip is the key. While some try to buy at auction or from short sale, we prefer to by the mortgage and control the asset as a lender throughout the foreclosure/short sale process
lakewood, NJ · Member since 2017 · 282 posts · 156 votes
8y
@David Putz- Just wondering if you can clarify what you mean by 'controlling the asset'- If you can say it in other words I might understand it better...
Investor · Jackson, NJ · Member since 2010 · 167 posts · 55 votes
8y
@Fradel Schaechter As a lender you are control of approving short sale, setting auction bids, and sometimes knowing condition of property prior to auction.
As the other's have already stated, there definitely are deals out there where you can cash flow here in NJ. The only thing is with the high taxes and price points, it makes it a lot hard to spot out and find deals. My suggestion is to keep running the numbers on potential deals as practice because eventually it will become second nature to you. You'll get so good at it where you'll be able to just look at a property at a very high level and determine within minutes if it will cash flow or not.
Real Estate Agent · Manalapan, NJ · Member since 2016 · 13 posts · 3 votes
8y
I have several rental properties in NJ and the key is to find a town with lower taxes or get a good deal on a foreclosure or short sale. I am a Realtor so I have access to find great deals. You should be able to find rentals near you because of the access to route 9.
Investor · West Orange, NJ · Member since 2017 · 85 posts · 37 votes
8y
Excellent topic. I was just wondering if there's still space to invest in Real Estate in NJ. As a beginner (looking to start investing soon, currently on learning, reading blogs, books, and trying to educate myself a lot before putting my head out of the cave) this is one of my main concerns, if there's still space for new investors for both BRRRR and Flipping. Would love to connect to any of you guys to see how I may help (and learn on the way). Thanks!
Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
8y
@Fradel Schaechter I think another point that might be helpful, is that 1) your criteria for cash flow evaluation is likely sound and 2) I would expect most properties available sale would NOT be cash-flow positive. If every property out there was cash-flow positive, every investor in the world would be picking them up. :)
I live in Philadelphia and would love to invest here in town, but the entry points are too high and anything on MLS is negative cash-flow. You have to get into the outskirts of the city to even get worthwhile deals. However you can venture into other parts near Philadelphia with good access to 95, and find cash flow properties. OK, they're not brand new construction and the tenants may not be the yuppie young professional everyone wants, but the key is good bones, good screening, good cash flow. Sometimes you have to look outside of your current area to find those.
Investor/Real Estate Agent · Portland, OR · Member since 2014 · 198 posts · 119 votes
8y
It is a struggle to find cash flowing properties in Portland, OR as well. It is still possible but it takes more work. Most of what appear to be good deals on the MLS sell above asking, which throw off the numbers for the majority of the properties I analyze. I definitely agree that finding off market deals is the way to go. Short sales and foreclosures may be better in your area but in Portland they go for well over asking as well. Connect with a good agent/wholesaler that can bring you off market deals and that should be able to help your business significantly.
Do you have a particular location within NJ that you are looking into? It's a large area to cover. For example, Camden used to be a ghost town when I lived in Philly. On the other hand, right now there is so much new construction happening in areas like Hoboken, Secaucus, Meadowlands, etc. Both are in NJ but they appear to be very different markets.
I don't invest in NJ, but I would think you would need to narrow down your area scope a bit.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
Thanks for your post- I have been trying to get a meetup near me going, and having trouble getting it off the ground. (I have thirty members, but people are not RSVP ing, not sure why...)
So I always enjoy hearing about other investors on this side of the world! Thanks!
lakewood, NJ · Member since 2017 · 282 posts · 156 votes
8y
@Joe P.- If I don't find an area that works for me here, I might move over and look in Philadelphia- thanks for the tip!
@Allan Szlafrok I have heard of investing in Newark, what does it take to be successful there? I know some neighborhoods can have problems with squatters when there are vacancies. What has your experience been so far?
@Chris K.- You are right, I need to be looking a more specific area (not just NJ in general). I actually looked the four closest neighborhoods to me, and when I saw the prices relative to income, it didn't add up. It made me wonder if I was in the wrong neighborhood, or just in the wrong state (property taxes was often about as high as the mortgage payments would be...)
I really appreciate all the feedback we got here- it is really a help for me on my journey... :)
Accountant · Caldwell NJ · Member since 2013 · 10 posts · 1 vote
8y
Hey Everyone,
I hate to resurrect an older thread, but what kind of cash flow numbers are you folks looking for per door? I know Brandon advocates for $200 for a single family and $100 for a multifamily, but I'm pretty sure his properties are no where near as expensive as those in our area.
Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
8y
@Ryan Stark Depends on how much you pay for these properties. If you can find some through wholesalers, off market, at the auctions, you may not be paying full market price and may be able to get a cash flow expected.
Accountant · Caldwell NJ · Member since 2013 · 10 posts · 1 vote
8y
Thanks for the quick reply Alina, but I was more wondering what type of FCF number people were looking for in the market while trying to calculate out a deal. If a higher than 10-12% ROI is required for a property to be a good investment, what type of FCF number is appropriate given that the properties in NJ are more expensive to acquire than in other parts of the country.
Realtor · Paterson, NJ · Member since 2017 · 134 posts · 97 votes
8y
Absolutely there are cash flowing properties here in NJ. You have to find them, but they are not hard to find. The main problem is getting them before the competition, but besides that you must search for them daily.
Even though I see that you are located in South NJ, I know of many people buying property in Newark, NJ and implementing the BRRRR strategy. An example of that is I know of someone who purchased a 3-family property for $125,500, put $34,000 of work into it, rented each unit out for $1275, and refinanced for $265,000 because the property was worth around $410,000 after the repairs.